Precision Castparts Corp.
2016
$37.2B
Why
Berkshire acquired Precision Castparts to gain a market-leading manufacturer of complex metal components and fastener systems for aerospace, power generation, and industrial markets. PCC's position in aerospace supply chains—providing investment castings and forged components to Boeing, Airbus, and military programs—offered the kind of essential, technically complex manufacturing that Buffett considers difficult to replicate. The acquisition made Berkshire a major participant in commercial aviation supply chains.
Impact
The acquisition proved more challenging than anticipated. PCC faced severe headwinds during COVID-19 as commercial aviation demand collapsed in 2020, requiring Berkshire to take a $9.8 billion impairment charge on the acquisition—one of the largest impairments in Berkshire's history. Significant workforce reductions were required to right-size costs to collapsed demand. As commercial aviation recovered through 2022-2024, PCC's financial performance improved substantially, though Boeing's ongoing production challenges have created continued volatility in demand.
Outcome
Precision Castparts remains wholly owned by Berkshire and is recovering to pre-pandemic performance levels as commercial aviation expands. The acquisition represents a cautionary example of concentration risk in a cyclical industry, but PCC's fundamental competitive position—technical complexity, customer qualification requirements, and scale advantages—remains intact. Buffett has acknowledged that he overpaid for PCC relative to normalized earnings but views the business as fundamentally sound for long-term ownership.